[ad_1]
Stock markets closed with large losses on Wednesday, even as the Federal Reserve kept interest locked in near zero, amid unusual trading activity fueled by amateur investors online.
The Dow Jones Industrial Average lost 635 points, or 2.1%, its biggest drop in the past three months, while the S&P 500 erased its gains of the year, losing 98.8 points, or 2.6% .
The cuts were not discouraged by Federal Reserve Chairman Jerome Powell, who backed additional budget support and dismissed fears it would lead to higher inflation.
President Biden is pushing a $ 1.9 trillion COVID-19 relief package.
But markets, which have been steadily growing since the initial shock of the pandemic early last year, have experienced a downturn amid an unusual phenomenon of amateur investors targeting certain stocks and exploding their valuations, upsetting short sellers.
Companies like GameStop have seen their valuations rise and fall at extraordinary rates, as online investment advice on sites like Reddit has targeted them. The value of GameStop has increased six-fold since the start of the year. Major hedge funds betting that stocks would fall have backed off and probably racked up big losses.
[ad_2]
Source link